Union Budget 2018: New employment policy and skill development to be key factors

With the general elections slated for 2019, the Union Budget 2018 is expected to spur different. While economists are concerned about unemployment, financial and legal advisers have a special take on GST and tax issues.

In the upcoming Union Budget 2018, the focus could be on the government’s proposals for skill development and employment generation, which was one of the key promises in its 2014 election manifesto. Jobs are likely to be a top priority after the disruptions caused by demonetisation and GST rollout.

The impact of both these fiscal calls is still lingering on the economy. For some time now, there has been conventional wisdom afoot that growth in India has resulted in relatively little employment creation. This hypothesis is named as ‘jobless growth’. However there is a burgeoning pushback against this hypothesis from the government.

Initiatives like Make in India, Skill India were launched to boost the economy. But have these initiatives curbed joblessness? Further, news sources suggest that the Pradhan Mantri Kushal Vikas Yojana was dragging to achieve the desired targets until last year. Till July 2017, out of a total 30.67 lakh candidates trained or undergoing training across the country, only 2.9 lakh candidates received placement offers. TimesJobs spoke to Ashwani Kumar, Professor, Tata Institute of Social Sciences to assess the current economic situations. He says, “Jobless growth is unconventionally odd but now has become a national economic discourse. According to the standard economic text, high growth will lead to high employment. After India came out of the Hindu growth rate, the economists believed that the future growth will take care of the upcoming economic issues”.

The job generation faced a six-year low in 2015 as only 1,35,000 new jobs were created compared to 4,21,000 jobs in 2014 and 4,19,000 in 2013, as per a quarterly industrial survey conducted by the Labour Bureau. Jobs in the IT sector have declined to 1.5 lakh annual recruitments from over 3 lakh recruitments in previous years. Top firms in the sector have reported layoffs in senior as well as entry-level staff segments. To soften the impact of demonetisation and GST, Arun Jaitley is likely to introduce new employment and skilling schemes. The employment policy could incentivise employers to create more jobs, introduce economic reforms appealing to companies along with supporting the medium and small scale industries which provide a huge chunk of jobs. These policies could engage more workers in the country’s organised sector that would enhance the minimum wages and social security.

If 2017 was the year of disruption, the government will be hoping that 2018 shapes up as a year of consolidation. Most analysts expect economic growth to pick up in 2018, helped by a global recovery and a domestic manufacturing rebound.